It is estimated that up to 1% of the U.S. population has been infected with hepatitis C, however, treatments to date have failed to cure the disease in the majority of treated patients. Patients with chronic hepatitis C treated with interferon-alpha exhibit a long-term response rate of 25%. Several groups have published data to show that phlebotomy alone can significantly improve transaminases in patients with chronic hepatitis C. Hayashi et al (Am J Gastroenterol 1994; 89(7): 970-3) have shown that in patients with chronic hepatitis C, phlebotomy alone resulted in normalization of transaminases in 50% of patients and reduced mean transaminases from 152 to 55 IU/L. Bacon et al (Hepatol 1993; 18(4): 150) have showed that in patients with chronic hepatitis C, phlebotomy alone reduced HCV RNA levels by 50% and mean transaminases from 172 to 101 IU/L. Unpublished data suggests that iron overload results in decreased CD8+ lymphocytes and resultant increased hepatitis C virus-induced liver damage (Grady, R.W. et al). Data therefore suggests that iron reduction, via phlebotomy, is beneficial in the treatment of chronic hepatitis C and may be additive to the effects of interferon-alpha. As iron reduction does have pronounced effects on transaminases (the major laboratory indicator of response to therapy in chronic hepatitis C), iron reduction must clearly be in the "control" arm of the study. This is a multicenter study involving nine other sites in the United States. The purpose of this protocol is to determine if depletion of hepatic iron stores results in an improved response in patients with chronic hepatitis C. The subjects eligible to participate in this protocol will be patients who have failed to respond to interferon-alpha given in the usual dosages for treatment of chronic hepatitis C over the past two years. Blood studies will be obtained to detect biochemical evidence of chronic hepatitis and iron status. Patients will be randomized to either phlebotomy to produce asymptomatic iron deficiency or to phlebotomy plus retreatment with interferon-alpha. The development of iron deficiency will be monitored by CBC and serum iron studies. Once iron deficiency has been achieved, one-half of the patients will be treated with interferon-alpha for six months. Iron deficiency will be maintained during the period of treatment with interferon-alpha by additional phlebotomy every other month for both groups. The benefits to the patient and to society relate to the determination of whether or not hepatic iron stores can be beneficial in the treatment of patients with chronic hepatitis C who have previously not responded to interferon-alpha. In the future depending on the results of this study, all patients with hepatitis C may initially undergo phlebotomy prior to treatment with interferon, to enhance response to this expensive, and toxic therapy.